Florida officials said today they have reached a $4 millionsettlement with Chicago-based insurance broker Aon Corp. overallegations the firm accepted commissions for commercial insurancetransactions without disclosing the arrangements to clients.

Attorney General Bill McCollum, Chief Financial Officer AlexSink and Insurance Commissioner Kevin McCarty jointly put out anannouncement of the agreement.

It calls for Aon to pay $2.6 million to Florida to reimburseaffected policyholders. Aon will also pay the state $1.4 million infees and legal costs to be paid within 10 days of the agreement,which was signed by Aon on May 21.

In the agreement, Aon denies any wrongdoing, "but desires toresolve this investigation to avoid the further expense and burdenof protracted investigations and litigations."

"Insurance customers, including government entities, need toknow what they are getting for the premiums they are paying," saidAttorney General McCollum in a statement. "Consumers deservetransparency and taxpayers deserve to be treated fairly."

The state said the three agencies determined that Aon brokeredmultiple insurance contracts in Florida from 1998 through 2004. Itsclients included several public entities in the state of Florida,including city governments and school boards.

The state said it uncovered evidence that Aon failed to informclients of all the compensation it received from insurers,primarily contingent commissions.

"Florida is committed to ensuring that insurance transactionsare both transparent and fair," said Ms. Sink. "When we determinethat an insurance broker is not clearly disclosing the amount andnature of all fees and commissions, we will take decisive action onbehalf of Florida consumers."

"Full disclosure in all insurance transactions is a must, andFlorida consumers deserve nothing less," said Commissioner McCarty."My office is committed to protecting Floridians, and thissettlement further demonstrates the progress Florida is makingtoward establishing a national standard for transparency ininsurance transactions."

The agreement, which will be in force for a period of 10 years,requires the broker to disclose its fees, compensation andcommissions, as it currently does, to clients. When the firm isacting as a managing general agent, it must disclose to the state'spolicyholder, prospective policyholder or their representativesthat Aon is acting as an MGA.

Also as part of the agreement, the state will drop appeals ithas before the Appellate Court of Illinois and will not pursue anyother civil suits in this matter.

In an e-mail, David P. Prosperi, vice president, global publicrelations for Aon said: "Aon is pleased to have this investigationbehind it, since this is essentially the last vestige of theSpitzer investigations of 2004.

"Since this investigation began, Aon has become the leader inthe industry in transparency and compensation reform, and that willcontinue to be our focus in the future."